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Belville v. Ford Motor Company

United States Court of Appeals, Fourth Circuit

March 25, 2019

LANCE R. BELVILLE; DONALD C. CARR; MINDI STEWART; STANLEY STEWART; CHARLES JOHNSON; JILL DURANT; MICHAEL ANTRAMGARZA; QUINTIN WILLIAMS; ACA LEGAL INVESTIGATIONS, INC.; JOHN MCGEE; DAVID H. PATTON; INEZ A. PATTON; PAMELA D. SMITH; BETTY J. TRINQUE; SHARON SHAFFER; ROBERT BRANDON; DANIEL GALLEGOS; TIMOTHY MATTHEWS; SAMUEL HAIRSTON; RHODA JEFFERS; MARY PHIPPEN; JONATHAN POMA; SHELLEY RILEY; CHARLES T. BURD; WILLIAM S. TROUTMAN; SHANE MAYFIELD; ANDREA MARTIN; THOMAS PORTER; HASEN DESIGN BUILD & DEVELOPMENT, INC., Plaintiffs - Appellants,
v.
FORD MOTOR COMPANY, Defendant-Appellee. and DEAN RICHARDSON; CHRISTINE SALAMONE; BEVERLY GORTON; JOSH LEGATO; ROOFWERKS, INC.; MILLS ALLISON; LAURA ELSINGER, and; GABRIEL KLETSCHKA, Individually and on behalf of all others similarly situated; CAROLYN CHASE; GREG PEET; TONY BURNETT; GEORGE SHAFFER; ROBERT AGRIS; JOHN E. GRIMALDI; JOLENE HARRIS, Plaintiffs,

          Argued: January 29, 2019

          Appeal from the United States District Court for the Southern District of West Virginia, at Huntington. Robert C. Chambers, District Judge. (3:13-cv-06529)

         ARGUED:

          John E. Tangren, DICELLO LEVITT & CASEY LLC, Chicago, Illinois, for Appellants.

          Jonathan D. Hacker, O'MELVENY & MYERS LLP, Washington, D.C., for Appellee.

         ON BRIEF:

          Adam J. Levitt, John E. Tangren, DICELLO LEVITT & CASEY LLC, Chicago, Illinois; Niall A. Paul, SPILMAN THOMAS & BATTLE, PLLC, Charleston, West Virginia; Gregory M. Travalio, Mark H. Troutman, Shawn K. Judge, ISAAC WILES BURKHOLDER & TEETOR, LLC, Columbus, Ohio, for Appellants.

          Sarah Virginia Bondurant Price, MCGUIREWOODS LLP, Richmond, Virginia; Jonathan D. Hacker, Bradley N. Garcia, O'MELVENY & MYERS LLP, Washington, D.C., for Appellee.

          Before AGEE and HARRIS, Circuit Judges, and DUNCAN, Senior Circuit Judge.

          AGEE, CIRCUIT JUDGE

         A group of individuals and corporations sued Ford Motor Company for an alleged defect in their purchased or leased Ford vehicles manufactured between 2002 and 2010. The district court dismissed various claims of certain Plaintiffs, excluded the opinions of the Plaintiffs' three experts, and granted summary judgment to Ford on all claims. Twenty-seven individual and two corporate Plaintiffs[1] now appeal and, for the reasons set out below, we affirm the judgment of the district court.

         I.

         In 2013, various individuals and corporations filed three related actions in the Southern District of West Virginia, alleging that their Ford vehicles had a defective electronic throttle control ("ETC") system, which could lead to an unintended acceleration ("UIA"). They further alleged that to prevent a UIA, Ford should have equipped their vehicles with an alternative failsafe system such as a Brake Over Accelerator ("BOA"). Based on this theory of defect, the Plaintiffs asserted numerous state and federal claims, including a violation of the Magnuson-Moss Warranty Act, breach of implied and express warranty, unjust enrichment, and a violation of state consumer protection statutes.

         Despite the alleged defect, only sixteen Plaintiffs alleged that they actually experienced UIAs, and none had suffered personal injury or property damage from the alleged defect. Nonetheless, all Plaintiffs sought economic damages arguing that the alleged defect made their vehicles worth less than their purchase or lease price. Specifically, they requested "damages to recover for diminished value at the time of purchase," Belville v. Ford Motor Co., 13 F.Supp.3d 528, 535 (S.D. W.Va. 2014), which they posit on appeal is-for "many" Plaintiffs- "the market price to repair the defective Class Vehicles." Reply Br. 17.

         Ford filed motions to dismiss all three actions, which the district court granted in part and denied in part. Bellville, 13 F.Supp.3d at 530. In 2014, the court dismissed, among other claims, the warranty and unjust enrichment claims of those Plaintiffs who had not experienced a UIA because they "failed to demonstrate a plausible claim that they paid more for their vehicles than their actual worth when they have used their vehicles without incident for many years." Id. at 542. After the dismissal order was issued, the Plaintiffs twice attempted to amend their complaints. In considering the motions to amend, the district court clarified which claims were dismissed, consolidated the three actions into one, and directed the Plaintiffs to file a consolidated amended complaint consistent with the court's orders.

         In December 2015, seventeen individuals and two corporations, as the Plaintiffs in the consolidated action, filed a Second Amended Master Consolidated Class Action Complaint, [2] which became the operative complaint. As distinguished from the initial complaints, all but two Plaintiffs[3] now alleged that they experienced a UIA due to a defective ETC system in their Ford vehicles. Based on this alleged defect, the Plaintiffs continued to assert one federal claim-a violation of the Magnuson-Moss Warranty Act-and numerous state claims, including breach of express and implied warranty, fraud, and unjust enrichment claims.

         Ford moved to exclude the Plaintiffs' expert witnesses and for summary judgment. By order of February 27, 2018, the district court granted partial summary judgment to Ford on the warranty and unjust enrichment claims, noting that because many factors unrelated to an ETC system may cause UIAs, the Plaintiffs' mere allegations that they experienced UIAs were not evidence of a defect. See Johnson v. Ford Motor Co., 310 F.Supp.3d 699 (S.D. W.Va. 2018). It observed that to survive Ford's motion for summary judgment, the Plaintiffs must establish "a causal link between their alleged [UIAs] and the alleged defect." Id. at 704. The district court held the Plaintiffs failed to produce evidence of causation, explaining:

none of [Plaintiffs' proposed] experts can say that, for those Plaintiffs who alleged they experienced [a UIA], their events were the result of the alleged defect with the ETC system. Quite simply, Plaintiffs produced no experts who can testify that [their] alleged [UIAs] were proximately caused by the alleged defect rather than some other known cause for such events.

Id. at 706-07. The court found, "this gap between Plaintiffs' experts' opinions and what allegedly occurred in Plaintiffs' specific vehicles fatal to Plaintiffs' warranty and unjust enrichment claims." Id. at 707.

         By order of March 26, 2018, the district court resolved the Plaintiffs' remaining claims. Johnson v. Ford Motor Co., No. 3:13-6529, 2018 WL 1512377 (S.D. W.Va. Mar. 26, 2018). The district court first granted Ford's motion to exclude the opinions of the Plaintiffs' three experts, Todd H. Hubing, Ph.D., Marthinus van Schoor, Ph.D., and Philip Koopman, Ph.D., holding that their opinions were inadmissible under Rule 702 of the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). And "the challenged expert opinions [were] critical to the remaining summary judgment issues." Id. at *1. Because the expert opinions failed to prove the Plaintiffs' theory of defect, the theory was "largely hypothetical." Id. at *2.

         As the district court explained, the Plaintiffs' "theory is that many predictable flaws may occur with the pedal sensors. Plaintiffs theorize that these flawed sensors produce faulty voltage signals that should trigger the ETC system's failsafe modes. However, due to a defectively designed ETC system, the failsafe modes are not activated, resulting in [UIAs]." Id. at *3. Thus, "testing of ETC systems was central to the experts' opinions." Id. at *2.

         The district court found that the experts' "testing was flawed, and Plaintiffs have failed to establish other means by which their experts can meet the reliability standard." Id. The district court noted, for example, that the only peer-reviewed publication relied on by the experts was a 2015 article by Dr. Hubing; however, the theory relied on in that article had been discredited by two federal agencies, the National Highway Traffic Safety Administration ("NHTSA") and the National Aeronautics and Space Administration ("NASA"). In analyzing the experts' testing evidence, the court noted the continuing failure of proof establishing any causal link:

Although Plaintiffs' experts purport to test [Plaintiffs' theory of defect], they leave a gap between analytical possibility and actual proof of occurrence. The experts attempt to excuse this gap by reporting that the defect leaves no evidence of its effect. However, this position shifts the burden to Ford to prove the negative. Furthermore, there is no "general acceptance" within the automotive safety or engineering community that underpins Plaintiffs' theory. The causes of [UIA] are myriad. Some events are attributable to driver error, while others are tied to different defects from cruise control to mechanical issues. Even though ...

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